Shares in Mannkind drop on inhaleable insulin sales decrease

US-based pharma start-up Mannkind witnesses a 16 per cent fall in its share value after news that it was depleting its cash reserves and had no new investors in the pipeline

US-based pharmaceutical start-up Mannkind witnessed a 16 per cent fall in its share value after news that it was depleting its cash reserves and had no new investors in the pipeline.

Shares in the company fell USD 1.73 to bottom out at USD 8.87, the lowest value for two years.

Mannkind, which is developing an inhaled form of insulin, has also postponed its earnings report, according to CFO Richard L Anderson, who is set to retire by the end of 2008. The results have been scheduled to be released on 9 August.

The company's CEO, Hakan Edstrom, stressed that Anderson's departure was not a sign that the CFO had lost confidence in the company. He tried to counter poor share performance by saying: "We are very much on our timeline for bringing the new insulin drug, Technosphere, to market."

Edstrom added that MannKind was planning to seek approval for the medication from the FDA by the end of 2008. The company has spent more than USD 700m developing Technosphere, which it hopes will make headway into the USD 21bn insulin market.

MannKind had been seeking a financial partner to infuse new money into the venture. But the funds did not materialise because potential investors want to see further results from Technosphere's ongoing clinical trials. Other factors in the lack of investment include the poor sales performance of Pfizer's Exubera, an inhaled form of insulin already on the market. MannKind says Technosphere, which comes in a smaller packet than the Pfizer drug, will be more effective and easier to use.

Company founder and chairman, billionaire Alfred E Mann, has already extended a USD 150m credit line to MannKind, which offers the company a cash buffer while it looks for more funding.

Cash reserves at Mannkind were down to USD 284m by the end of June 2007 from USD 365.6m in Q1 FY07 and USD 436.5m in Q4 FY06.

Wachovia analysts maintained their "Market Outperform" rating for the firm on 3 August.